BANGALORE:In a puzzling contrarian trend, some senior executives at Cognizant Technology Solutions have sold shares worth at least $68 million (Rs 365 crore) so far in 2012, even though most Wall Street analysts covering the technology services provider recommend buying the stock.

The maximum number of shares was sold by Vice Chairman Lakshmi Narayanan. He sold 7.5 lakh shares and pocketed $52.4million (Rs 281 crore), while R Chandrasekaran, group chief executive of technology and operations, sold 1.14 lakh shares for $7.7million (Rs 41crore).

Share sales by senior management could indicate many things—that the executives believe the stock is overvalued, that they think that business prospects of the company aren't bright or that there are better investment opportunities elsewhere. It could also be because the selling executives need money to meet some prior personal commitments.

"It is an individual's decision to sell shares allotted under the employee stock option programme, performance linked stock units or restricted stock units. Individuals may decide to sell for a variety of personal reasons," Cognizant said in an email.

Compared with the company's overall market capitalisation of about $20 billion, the sum is paltry, but the amount is more than double of what Cognizant paid its top five senior executives last year.

In 2011, Cognizant spent $29million to pay its CEO Francisco D'Souza, the then chief financial officer Gordon J Coburn, group chief executive for global client services Rajeev Mehta, general counsel Steven Schwartz and Chandrasekaran, according to latest data available from independent researcher Morningstar.

Cognizant said the share sale by the executives was pre-planned and done in compliance with regulations. A company spokesman said many of the sales were "related to options that would have expired if not exercised". However, he did not reveal how much of the $68 million worth of shares sold was on account of an impending option expiry.

Cognizant has been one of the fastest growing technology outsourcing services providers in the world with its revenues increasing 20% in 2012. Of the 28-odd Wall Street brokerages covering the Nasdaq-listed stock, only Goldman Sachs has a sell recommendation. Almost all of the rest have a "buy" rating with an average target price of about $77 for the shares, which currently trade at about $69.

With a target price-earnings multiple of 18x, analysts have assigned a higher valuation for Cognizant than all the other India-based technology outsourcing service providers, including Tata Consultancy Services and Infosys.

Neither of the two executives—Narayanan and Chandrasekaran—hold any shares in the company after their most recent sales. The company does not disclose details of their stock option ownership.

Interestingly, the share sales come at a time when the company is spending $1 billion to buy back shares to "drive shareholder value." So far, Cognizant has spent nearly half the amount. As a result of the fewer floating shares, the company was able to raise its earnings per share forecast for the year to December.

The share repurchase programme was launched in December 2010, when Cognizant executives sold nearly $112 million worth of shares. It initially had a budget of $150 million that was later expanded to $1 billion a year-and-a-half later,

In 2011, Cognizant insiders sold nearly $16 million worth of shares with the vice chairman selling shares worth $6.7 million, while Chandrasekaran earned $4 million. Over the past few years, these executives have consistently sold shares and have never had any meaningful stake in the company.

"As long as information isn't asymmetric where managers have some definitive information about the business that affect the results, selling of stock by a few senior managers is perfectly fine," said Shriram Subramanian, founder and managing director at InGovern Research, an institutional investor advisory. "Of course, if all senior managers are selling at the same time and clearing out all their holdings, it could be a strong signal for other investors."